By FINTECH Books Contributor, Evelyn Thar
Follow on Twitter: @evelyn_thar
Truly understanding your customer is vital in today’s digital economy particularly for a financial industry which lost trust during the banking crisis of 2008. This is not only in the effort to regain customers’ trust but to be able to offer enhanced and targeted services. This can be achieved with a greater knowledge of the customer, their preferences and habits.
The key to these new digital marketing approaches is the combination of personal and big data with targeted marketing interventions. This means that the nominal personal data needs to be enhanced with sustainable and appropriate behavioral data to gain valuable customer insights. Online user behavior and social media networks fill this gap in collecting personal data about prospects and clients.
However, if we look at regulations in the finance industry we quickly see there are two regulatory stumbling blocks that would make collecting personal data out of the question. On the one hand there are the regulations imposed specifically on financial institutions like the second Markets in Financial Instruments Directive (MiFID ii) for the EU, the US Department of Labour’s new Fiduciary Rule or the FFSA/FIDLEG in Switzerland.
On the other hand are more general privacy protection issues which are currently a major point for governments across the world. The EU’s strict new General Data Protection Regulation (GDPR) and coming amendments to Switzerland’s FADP look set to change the landscape for data usage globally.
RegTech can be leveraged to combine approaches while remaining compliant with all regulations. The RegTech approach uses a mix of data collection methods, user consent, digital marketing campaigns and digital services. To meaningfully understand the customer is possible for regulated industries by combining smart digital marketing strategies that adhere to compliance restrictions and clever marketing automation services.